A co-packer is a third-party food and beverage processor that agrees to manufacture a product specific to a clients’ recipe and needs. It is a relationship that allows foodservice providers to brand and create their own products without requiring substantial capital to build and develop a standalone facility.
Managing this type of transaction requires forethought, industry knowledge, and a rock-solid agreement. You may find the discussion below helpful in achieving your goals with a co-packer. As always, speaking with a food business lawyer in California is the best way to apply legal advice to your specific situation.
What a Co-Packer Agreement Should Include
Contracts are a practical tool for establishing how both parties manage the co-packer/manufacturer relationship. A comprehensive agreement that considers the risks of doing business together is one way to approach the agreement’s construction.
Consider the following elements when creating a co-packer agreement:
Specific Requirements: Vagueness can be the kiss of death in a contract. Instead, create a co-packing deal that considers every aspect of the terms and conditions regarding the arrangement. Understandable yet concise legal language can cover the needs of both parties. By doing so, you are ensuring satisfaction across the board.
How to Handle Mislabeled Products: Mislabeled food products are a big deal for the manufacturer, brand, and-co-packer. Food labeling compliance is crucial to the compliance and health of your food product or brand. Discuss how your co-packer handles mislabeled food. Since they are like a strategic business partner, they must understand your labeling requirements clearly.
Undeclared Allergen Policy: Food allergies are a hot-button issue in the U.S. since they are often the subject of product recalls. From time-to-time, your co-packer’s facility may accidentally introduce an allergen into your product that you do not list on the label. Albeit, this occurrence is rare. Therefore, addressing how the company will resolve the issue is extremely important to the success of your business.
Intellectual Property Rights: A contract with a co-packer contains a unique element regarding intellectual property. Mostly, you and the co-packer are sharing resources that make your product unique to the market. It is difficult for manufacturers and brands to share their ‘secret sauce’ without feeling exposed. Combat this dissonance by including a non-compete and non-disclosure clause in the agreement.
Speak with a Food Business Lawyer in California About Co-Packer Agreements
The most effective way to address specific contract concerns for your business is to discuss your needs with an attorney who understands the foodservice industry. He or she can provide insight that achieves that best result possible between you and your co-packer. There is also an opportunity to ensure that specific issues related to your product are addressed.
At De Cárdenas Law Group, it is our mission to see you succeed in every legal aspect of your business. Let us help you draft a comprehensive co-packer agreement that helps both parties feel secure as you conduct business together. You can schedule a meeting with our food business attorneys in San Francisco or South Pasadena by calling (626) 577-6800.